If (it) fails, bank lending would freeze, stock markets would likely crash, and ... economies would crater. Nations ... could see their economic output fall temporarily by as much as X percent, according to ... forecasters. The financial and economic pain would spread west and east as (Europe) and Asia get ensnared in the credit freeze and their exports ... collapse.Oh, yeah, October 2008. Wall Street's collapse was going to destroy America.
Only now, the Eurozone's collapse is going to destroy Europe.
Of course, Wall Street wasn't allowed to collapse.
BUT, while I don't agree with tea partiers about not having acted in 2008, as well as disagreeing with the idea of running a nation without some sort of central banking system, it's clear that the no-strings TARP "cure" for Wall Street wasn't a cure for the American economy in general, either in 2008 or 2001.
So, let's hope that Western Europe's version of paper-pushing technocrats attaches some strings to Eurozone reform. If Greece needs the boot, then boot it. If the European Central Bank, or the degree of "federalism" emanating from Brussels, needs to be strengthened, then strengthen it. And, if member nations can't agree to that, then wind down the Eurozone.
We probably could have "wound down" Wall Street, too, if its kleptocrats refused to accept tight strings as part of TARP. Unfortunately, the corruption of mainstream bipartisan American politicians, including in having deliberately reduced shareholders' power to sue corporate boards, meant that the wind-down option here in America wasn't that viable. A Darwinian Goldman Sachs and JPMorganChase likely would have survived. A vulture-like low-feeding George Soros would have repeated his 1998 international exploits on an even grander scale.
That said, because Europe's crisis is in part a monetarist crisis, or so it seems, failure to achieve a good resolution one way or the other probably will enable the Soroses of the world even more than the Goldman Sachses.
At the same time, because the Eurozone "project" isn't the same as the U.S., the whispered-about possible cataclysm isn't likely, should Eurozone ministers "fail."
I actually see the current crisis as worse, from the financial world POV, and from member nations' POV, than the U.S. debt supercommission, but not as serious as TARP. Germany IS too big to fail. The U.K., which has problems enough of its own, is outside the Eurozone. The Netherlands is fine. If push comes to shove, for France, Nicolas Sarkozy will perform financial cunnilingus on Angela Merkel, if necessary, to bind Gaul that tightly to the Deutschland. Both Euro and non-Euro parts of Scandanavia are doing well, too, as is Switzerland.
That all said, per my one poll on the left, it is indeed possible that the combined European Union economy, including Eurozone and non-Eurozone members, will fall behind the U.S. as a result. It is even vaguely possible that the EU, not just the Eurozone, could at least "reformulate," if not break up.
And, maybe it needs to.
Just don't throw a TARP over it.
If nothing else, maybe the U.S. can still teach Europe a thing or two -- about what not to do.